Published in Mobiles

Google paid Apple $20 billion to go on Safari

by on02 May 2024


Microsoft paid $10 billion to rule AI

Search engine Google paid the fruity cargo cult Apple $20 billion in 2022 as protection money to be the default search engine in Jobs’ Mob’s Safari browser.

The payment agreement between these two tech giants is not just a financial transaction but a pivotal point in a landmark case. Antitrust enforcers allege that Google has illegally monopolised the market for online search and related advertising, with this deal at the heart of the matter.

The Justice Department and Google will offer closing arguments in the case today. A decision is expected later this year.

Google and Apple had hoped to keep the payment amount under wraps, adding a layer of mystery to the trial. At the trial last fall, Apple executives testified that Google paid “billions” without specifying a number. But a Google witness accidentally disclosed that Google pays 36 per cent of the revenue it earns from search ads to Apple.

Court documents filed late Tuesday before the closing arguments mark the first public confirmation of the figures by Apple’s senior vice president of services, Eddy Cue. Neither company discloses such numbers in its securities filings because they are likely to anger Wall Street. To put this into perspective, Microsoft paid half of that sum to get its foot in the door of AI. Google gained access to a browser that hardly anyone uses.

Meanwhile, the figures questioned Job’s Mob’s ability to sell gear, which is why it is one of the big five technology companies. In 2020, Google’s payments to Apple constituted 17.5 per cent of the iPhone maker’s operating income.

The agreement with Apple is the most important of Google’s default deals since it sets the search engine for the most used smartphone in the US.

Apple first agreed to use Google in the Safari browser for free in 2002. However, the companies later decided to share revenue from search advertising. By May 2021, that translated to Google paying Apple more than $1 billion a month for its default status, prosecutors said in the filing.

Microsoft, a competitor of Google, has repeatedly tried to sway Apple away from its relationship with Google. According to the court documents, the company made a bold offer, proposing to share 90 per cent of its advertising revenue with Apple to make Bing the default in Safari. These figures, which could potentially reshape the industry, weren’t previously disclosed.

Microsoft Chief Executive Officer Satya Nadella testified at the trial last year that the company was willing to make several concessions, including hiding the Bing brand, to persuade Apple to make the switch, which he said would be “game-changing.”

Last modified on 02 May 2024
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